Delhi High Court Grants Bail to Licensed Pharma Dealer | Mere Possession of NDPS Drugs Under Valid License Doesn’t Attract NDPS Act Without Misuse, Holds Court
Safiya Malik
The High Court of Delhi Single Bench of Justice Arun Monga granted bail to an individual licensed under the Drugs and Cosmetics Act, 1940, who was accused of violating provisions of the Narcotic Drugs and Psychotropic Substances Act, 1985 (NDPS Act). The court ordered the applicant's release on bail, noting that the criteria under Section 37 of the NDPS Act had been satisfied. The bail was granted subject to furnishing a bail bond and surety to the satisfaction of the trial or duty judge.
The court stated that "the accused/applicant is entitled to bail as the applicant has made out a case for grant of bail." It was held that the continued custody was only preventive in nature and no longer required, as the investigation was complete, charges had been framed, and the trial had commenced. The court made clear that the order was confined to the bail application and would not impact the merits of the case during trial.
The matter concerns a licensee under the Drugs and Cosmetics Act, 1940, who was allegedly found in possession of narcotic and psychotropic substances in quantities exceeding permissible limits. The Central Bureau of Narcotics (CBN), New Delhi, registered a case under Sections 21, 22, 29, and 30 of the NDPS Act.
On 13 February 2024, officials from the Central Bureau of Narcotics conducted a search at the premises of M/s Vin Healthcare in the absence of the applicant. A personal search of individuals present at the location yielded no incriminating materials. However, discrepancies were noted between the recorded stock of NDPS medicines and the actual inventory.
Following this, the applicant was informed of his rights under Section 50 of the NDPS Act and provided written consent for a search. This led to the seizure of several NDPS drugs, all of which were sealed, labelled, and documented. Separate lists for retail and wholesale stock were prepared, revealing significant mismatches. Additionally, two hard drives containing inventory records were seized.
The following day, on 14 February 2024, the applicant was arrested at approximately 18:00 hours and informed of the reasons for arrest, primarily being the inventory mismatch. A personal search memo was prepared, and the arrest was formally recorded. The arrest documentation was submitted to the Superintendent of the Central Bureau of Narcotics by 20:00 hours the same day. Summons under Section 67 of the NDPS Act were issued for his examination.
The investigation reportedly disclosed significant inconsistencies between the stock records and actual quantities of NDPS drugs found. A criminal complaint was filed before the competent court. The Special Judge (NDPS), Patiala House, New Delhi, took cognizance under Section 22 of the NDPS Act on 29 October 2024. The trial is ongoing at the stage of miscellaneous appearance.
As per the prosecution's submissions, various NDPS medicines were seized from the applicant's premises. These included 12,592 Fentanyl Injections, 2,353 Fentanyl Patches, 4,540 Morphine Sulphate Injections, 16,510 Morphine Sulphate Tablets, 610 Diazepam Injections, 8,080 Pentazocine Injections, 3,820 Tramadol Injections, 675 Ketamine Injections, 226 Buprenorphine Patches, 800 Buprenorphine Tablets, 325 Midazolam Injections, 1,250 Remifentanil Injections, and 50 Pethidine Injections.
The applicant made a voluntary statement under Section 67 of the NDPS Act on 14 February 2024, in which he corroborated the recovery of the substances and allegedly admitted to supplying NDPS medicines to the illicit market using fake demand drafts, medical prescriptions, and invoices.
The applicant had earlier approached the Special Judge (NDPS) at Patiala House Court with a regular bail application, which was dismissed on 6 September 2024. He then filed the present application before the Delhi High Court.
The prosecution opposed the bail application on the basis that the applicant failed the "twin test" under Section 37 of the NDPS Act and relied heavily on the applicant’s voluntary statement. The prosecution also argued that the applicant was forging doctors' prescriptions and selling drugs illegally in breach of his license terms. Further, it was submitted that the procedure under Section 52 of the NDPS Act was followed, and the applicant was informed of the grounds of his arrest.
In response, the applicant contended through counsel that he was a valid licensee under the Drugs and Cosmetics Act, 1940, and that the license had been verified by the CBN. It was further argued that procedural safeguards were violated, especially those under Sections 51 and 52A of the NDPS Act. The defense relied on the Supreme Court’s judgment in Pankaj Bansal v. Union of India, arguing that grounds of arrest must be explicitly served and not merely read out.
The applicant also pointed out that the complaint itself mentioned another individual, Mr. Venkatesh Reddy, as having helped set up the business and supplied the medicines. The defense questioned why no action had been taken against Mr. Reddy. It was also argued that the applicant had no criminal antecedents and had been in the business for over 14 years without any prior violation.
The court recorded: "Bail is opposed on the premise that the inventory mismatch indicates illicit sale of drugs, thereby invoking the stringent conditions of Section 37 ibid of the NDPS Act. However, pertinently, the prosecution does not challenge the validity or legality of the applicant’s license."
It was further observed: "Mere possession of drugs or psychotropic substances under a valid license does not, therefore, automatically trigger the NDPS provisions." The court noted that the prosecution's claim regarding unlawful sale remained an assertion at this stage.
The court pointed out: "The license (Annexure C) issued to applicant does not specify any quantitative limits, making it unclear whether the alleged mismatch constitutes a violation." The court acknowledged that possible clerical errors or negligence in record-keeping could be an explanation, stating: "Disregards the principle of presumption of innocence until proved guilty."
On the issue of shared responsibility, the court observed: "The license also lists two persons i.e., the accused herein and Ms. Neha Bedi as the technical member. She also thus appears to be responsible for the oversight, if any, in maintaining the inventory." The court noted that no evidence was found against Ms. Bedi.
Regarding Venkatesh Reddy, the court noted: "Conceded version of the prosecution is that Venkatesh Reddy, who set up Vin Healthcare along with applicant/accused and supplied drugs/psychotropic substance, was though summoned and his statement was recorded, but no evidence was found against him, creates a cloud on the further preventive custody of the accused herein."
In relation to the second test under Section 37, the court stated: "The prosecution acknowledges the applicant has no criminal record and a clean history. With over a decade of experience in this regulated industry, the applicant’s past conduct has been lawful and transparent."
The court held that procedural violations were significant: "It is admitted that the grounds of arrest were not formally communicated, although the prosecution claims they were conveyed verbally—a claim disputed by the applicant." The court stated: "It is undisputed that there is no proof that the grounds of arrest were properly conveyed to either the accused or his family at the time of arrest."
The court concluded: "Since this is a statutory right under the NDPS Act and a constitutional guarantee under Article 22, any such violation is a serious issue."
On the question of tampering with evidence or influencing witnesses, the court noted: "It is not disputed that it is all documentary in nature coupled with the inventory which have already been seized by the prosecution." As such, the court held: "There is no probability of his tampering with it."
Finally, the court observed: "Voluntary/confessional statement made by the accused while in custody qua his admission of selling the drugs/medicine in the illicit market also has to be viewed with certain circumspection."
The court directed: "Accordingly, the application is allowed. Applicant is directed to be released on bail on furnishing of bail bond and surety to the satisfaction of the learned Trial Judge/ Duty Judge as the case may be and subject to the usual conditions to be imposed by the learned trial Judge/Duty Judge."
The court made clear: "Nothing observed hereinabove shall amount to an expression on the merits of the case and shall not have a bearing on the trial of the case as the same is only for the purpose of disposing of the present bail application."
It was also clarified: "In case applicant is found involved in any repeat offence while on bail, the prosecution shall be at liberty to seek cancellation of the bail granted to the applicant in the present case vide instant order."
Advocates Representing the Parties:
For the Petitioner: Ms. Mercy Hussain, Mr. Nitin Narang, and Ms. Kirti Singh, Advocates
For the Respondents: Mr. Satish Aggarwala, Senior Standing Counsel with Mr. Gagan Vaswani, Advocate
Case Title: Naveen Handa v. Central Bureau Narcotics
Neutral Citation: 2025: DHC:6090
Case Number: BAIL APPLN. 4070/2024
Bench: Justice Arun Monga
